Rep. Raymond Tells Medicaid Dentist “We Got to do Something to Change the System”

This past Wednesday, the Texas House Human Services Committee held public testimony on the effectiveness of SB 1803 passed last session to put into legislation due process rights for Medicaid providers under investigation by the Health and Human Services Commission Office of Inspector General. A number of dentists who have been put under payment holds and accused of “credible allegations of fraud” testified.

Texas House Human Services CommitteeStill under investigation even after hearing

One of the dentists, Dr. Juan D. Villarreal of Harlingen Family Dentistry was exonerated of wrongdoing at his payment hold hearing that was held back in early 2012 at the State Office of Administrative Hearings.  The SOAH decision was finalized in February, 2013.

Despite this ruling, he testified that lawyers from the state are still at present calling former clinic staff to question them about whether or not they were incited to commit fraud. The state is also holding over $1.3 million of Medicaid funds that both SOAH and a Travis County judge have ordered returned.

Change the system

After his testimony, Committee Chair Richard Peña Raymond said “What you have laid out, I can’t imagine any member is in favor of something like that happening or continuing and so I hope we can address this. That’s all I can say. If you did wrong, we want to get you. If you didn’t…, we just got to do something to change the system.”

Dr. Villarreal’s written testimony follows. The video of his testimony is below and  up on Youtube as well.

Good Morning Mr. Chairman, Committee members, staff. My name is Dr. Juan Villarreal. I am the owner of Harlingen Family Dentistry. HFD has been a premier practice in South Texas for over 31 years and is now the largest single practice in one facility in Texas with over 140 employees. I was educated at the University of Texas Health Science Center at San Antonio and have practiced for our military at Ft. Sam Houston. I was appointed to the Texas Board of Dental Examiners and served from 2001 to 2008.

Last year I testified on behalf of SB 1803 and I was very happy to have Governor Perry sign that bill into law because in 2011 we were put on a Medicaid payment hold due to an HHSC-OIG investigation of our orthodontic billings. Only two practices so far in the last three years have had payment hold hearings before the State Office of Administrative Hearings.

That should tell you at first blush that something is very wrong with this process even after 1803 came into effect.

We were the first case SOAH heard back in early 2012 and they found that we had not committed any fraud, waste or abuse in our billings. That ruling was finalized in early 2013 by an HHSC judge, who announced her retirement shortly afterwards.

Despite this success at SOAH, unfortunately, we have not had any relief with SB 1803 . In fact, it is worse. Let me tell you why:

1. As a result of the decision, we expected a return of some 1.3 million dollars that had been withheld. We have expenses and we have staff and we had spent some $400,000 in the SOAH process. HHSC refused to return it. We went before a Travis County judge who agreed with us that it should be returned and ordered HHSC to do so. They still refused.

There needs to be a provision created next session that HHSC will immediately return funds once the provider has been cleared by SOAH at a payment hold hearing.

2. Apparently because of our success at SOAH, HHSC then launched a further investigation into our regular dental billings. This investigation is apparently still ongoing as I have been called by several former staff that lawyers from the state are calling them, asking if we incited them to commit fraud.

There needs to be some provision within a new due process bill to protect providers from investigations that are harassing or retributive.

3. HHSC also has an overpayment recoupment claim against us. SB 1803 explicitly directed HHSC to docket an overpayment hearing at SOAH if requested by the provider. We made such a request. But even though this occurred after the effective date of SB 1803, HHSC docketed our case before an HHSC Judge claiming that the overpayment claim was somehow made before SB 1803 went into effect. This directly thwarts the clear intention of the Legislature and you should make clear to HHSC that SB 1803 means what it says.

As you can see, 1803 was a good start. But a lot of work must be done next session to create a level playing field that includes due process and allows health care providers in Texas to remain in practice to serve the needy population of our state.

Thank you.

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